Life Insurance Information

We specialise in helping people who have had a life insurance application declined, postponed or refused.

We can also help if you are in perfect health too!!

Most people understand that if they have a family or significant liability, then life insurance is a vital product to make sure the people and things they care about are protected.

There are many different types of life insurance available depending on your needs. The good news is that we are able to help you with all of them.

We take the time to ensure that our customers have the most appropriate insurance to meet their needs, whilst also making sure that the price is right. Some of our most satisfied customers came to us as they were unable to obtain the cover they wanted elsewhere.

We can't guarantee that we can get you insurance, but we will leave no stone unturned. Given our experience, if we are unable to get you life insurance cover, it is unlikely you will be able to get it at all.
We will however give you a good understanding on future insurability, and an honest assessment of your situation.

Whatever your insurance needs we are able to help you. We have access to all the products from all of the UK's leading insurance providers.

Our aim is to give you all the information you need. This page is full of information about the various types of term life insurance which we hope will help you decide on the type of life insurance you need.

If you need any help or information at any time, please feel free to contact us on 020 33 55 4831.

Life Insurance FAQs

The section below will give you detailed information on the various types of term life insurance policies, what they are intended to cover and how they work.

If you feel any information is missing, or if you would like more information on any aspect, please feel free to contact us.

What is Life Insurance ?

A life insurance policy is designed to pay out a lump sum upon the death of a person or persons named on the policy.

There are many reasons why life insurance is required, the most common being to provide for a loved one, or to ensure the repayment of a long term debt such as a mortgage.

Besides offering Life Cover it is also possible to include Critical Illness cover and a number of other benefits on your policy if you so wish.

It makes sense to ensure that you have sufficient life cover to repay your mortgage if you die. This is particularly important if you own the property with a partner or have a family. If you have a young family you should consider the financial impact on the family if one of the parents were to die. In some cases only one partner may be in employment while the other brings up the children, however you should both consider life insurance as there will be significant financial pressure if either of you were to die. If the working partner were to die, the family have lost the benefit of the regular income. If the partner bringing up the children were to die, then the remaining partner may need to give up work, reduce their hours worked, take a different job, or pay for additional support such as childcare. Either way, the loss of a parent will not only have a hugh emotional impact, but a major financial one as well.

Even if you are single, in some circumstances it would still be a prudent decision to take out insurance. You never know when your circumstances may change and you may find you are uninsurable when you come to apply in the future.

The main benefits of term life insurance are as follows :

You can insure yourself to cover a debt such as a mortgage for the exact term of the mortgage

Depending on your circumstances, you can either purchase level term insurance, or decreasing term insurance, which means you can make sure you keep premiums to a minimum

You can include other benefits at the time of application, such as critical illness benefit. This means that you have all of your cover in one policy, again helping keep cost to a minimum

People will normally select the term of their policy to coincide with major events in their lives. If you are looking for cover to protect your family, then setting the term until the children are 18 or 21, is a logical decision. Equally many older couples will select a term to expire at retirement age. This way they have the peace of mind of knowing that they have provided for their partner.

If you are protecting a mortgage, loan or other liability, then the term is normally set to the date the loan would normally have been repaid.

The typical term to repay a mortgage is 25 years. During this time, most people will see many changes to their life and lifestyle - they could meet a new partner, get married, have children, buy one or more new homes.

Unfortunately during a 25 year period, statistics also tell us that at least 20% of all deaths will occur in men aged between 25 – 65. Female deaths in the same age range is over 12%. *

* The Office for National Statistics

Even if you are a single person when you buy your first property, it makes sense to protect your mortgage from the outset. As we have pointed out, there could come a time in your life where the insurance providers consider you uninsurable due to poor health or accident. Imagine how you would feel if you had a young family and found you could not insure yourself, even though you could have when you first bought the property.

Obviously cost is important, and so you will probably only want to insure yourself for the amount you will owe to your mortgage lender during the period of the loan.

Also the type of mortgage could have an impact on the premium.

An interest only mortgage is one where only interest is paid during the term of the mortgage, and so the mortgage debt doesn't reduce. The amount originally borrowed has to be repaid in full on the day you redeem the mortgage. To protect this type of mortgage, you need a policy that will pay out the full amount of your mortgage at any point during the mortgage term - whether you die in the first year of your mortgage term, or the last year. This is known as a level term policy.

If you have a repayment capital and interest mortgage, then slowly over the term of the mortgage you reduce the amount you owe to the mortgage lender. It is possible to buy a policy where the amount paid out reduces approximately in line with the reducing mortgage debt (assuming mortgage interest rates stay within a certain range). This is known as a decreasing term policy and because the amount to be paid out reduces, they are normally cheaper than level term policies.

If you are concerned about any risk associated with decreasing term insurance then, if you can afford the premiums, you could be better off opting for a level term policy. Any surplus cash would of course go to your family if you died during the policy term.

If you want to discuss your case in greater detail, then please call us on 020 33 55 4831.

Decreasing Term Insurance

Most people who have a repayment mortgage choose to have decreasing term insurance. This is commonly called Mortgage Protection, however it should not be confused with Mortgage Payment Protection which will pay your mortgage payments for typically 12 months.

The idea behind decreasing term insurance is that the amount that would be paid out reduces over time, in the same way as your mortgage debt reduces. This would not be appropriate cover for somebody who has an interest only mortgage, as the mortgage debt does not decrease.

An interest only mortgage should be protected by a level term insurance policy. These policies will pay out the same amount whenever the policy holder dies within the policy term.

If you are in any doubt, please call us on 020 33 55 4831.

As the benefit reduces over time, a decreasing term life insurance policy is the cheapest option to protect repayment mortgages.

At a very simple level they work in the following way :

If you die in the first year of the policy, an amount very close to the full sum assured should be paid. If you die, for example, in the 10th year of the policy, part way through the term, then a reduced amount will be paid. The amount paid out will depend upon the terms of the policy.

To help ensure that the amount paid out will be sufficient to repay your mortgage the insurers apply a "policy interest rate" to the policy. This interest rate is typically between 7% - 10%. Assuming you bought a policy that has a 7% policy interest rate then as long as mortgage interest rates do not go above 7% the amount paid out by the policy should be sufficient to repay your mortgage in full.

If mortgage rates were to exceed 7% (in the example above) then there may be a shortfall between your mortgage debt and the amount paid out by the life insurance policy.

The policy expires at the end of the term. No claims can be made after this point. The premiums are not refunded if a claim is not made, and there is no surrender value.

These policies are ideal for protecting repayment capital and interest mortgages (not interest only). They are the cheapest form of insurance for this type of mortgage.

Decreasing term is also used to provide another type of life insurance known as Family Income Benefit. This type of policy will pay your family an annual income during the term of the policy. However each year that you live, the total amount the insurer would have to pay out reduces. For example if you insured yourself to provide £10,000 per year for 10 years, then if you died after 3 years the maximum paid out would be £70,000 (£10,000 for the remaining 7 years). However if you were to die after 5 years then the maximum paid out would be £50,000 (5 remaining years x £10,000). This makes Family Income Benefit a very cheap and attractive option of providing for your family.

A decreasing term policy is used to insure the following events :

A long-term debt or loan (such as a mortgage)

To provide for children in the event of a parent dying

To protect a surviving partner from hardship should one of you die

There are many other uses as well.

The monthly premium can either be guaranteed or reviewable.

If you choose a guaranteed policy, then the monthly premium amount you initially pay will be the same for the entire life of the policy (unless you choose to increase the policy with inflation).

Choosing a reviewable policy means that after a certain period (typically 5 or 10 years) the life insurance company will review the policy to see if they can still offer the cover at the same price. At this point they may alter the monthly premium. The policy will be reviewed on a regular basis.

Reviewable policies are typically cheaper at the start of the policy than guaranteed policies.

We are happy to provide quotes for both types of policy.

It is important to note that if you do not answer any question on the insurer's application form truthfully, you could run the risk on invalidating any claim you may make.

Level Term Insurance

Level term insurance means that the benefit that will be paid out by your life insurance policy will remain constant (or level) throughout the term.

If you insured yourself for £100,000 for a term of 10 years then, if you die at any point during the term, the full £100,000 would be paid.

This is therefore an ideal policy to repay an interest only mortgage.

As the amount owed on an interest only mortgage does not decrease over the term of the mortgage, you will require a policy that will pay out the full mortgage debt whether you die in the first year of holding the policy, the last year, or anywhere else in between.

The policy expires at the end of the term. No claims can be made after this point. The premiums are not refunded if a claim is not made, and there is no surrender value.

The monthly premium can either be guaranteed or reviewable.

If you choose a guaranteed policy, then the monthly premium amount you initially pay will be the same for the entire life of the policy (unless you choose to increase the policy with inflation).

Choosing a reviewable policy means that after a certain period (typically 5 or 10 years) the insurance company will review the policy to see if they can still offer the cover at the same price. At this point they may alter the monthly premium. The policy will be reviewed on a regular basis.

Reviewable policies are typically cheaper at the start of the policy than guaranteed policies.

We are happy to provide quotes for both types of policy.

It is important to note that if you do not answer any question on the insurer's application form truthfully, you could run the risk on invalidating any claim you may make.

How long can the policy term last ?

The term of a life insurance policy could be anything from 1 year up to about 40 years.

The maximum term offered by the insurer may reduce depending upon the age of the insured person. Most providers tend not to offer a term beyond the age of 80.

If you choose a term of 1-5 years, you may lose some benefits. The obvious example would be a life insurance policy where terminal illness benefit may be withdrawn. Terminal illness benefit would normally pay on the diagnosis of a terminal illness. However, the policy would still pay out on the death of the person insured.

When will the policy pay out ?

The policy will pay out if the insurable event occurs during the term of the policy. This means that if you bought a life insurance policy to cover you for 20 years and you died after 10 years, then the policy would pay out.

The policy will normally cease at this point, once a claim has been made. This is typically the case even if you have several events insured in one policy, for example a husband and wife insuring each other against death or critical illness.

It is possible however to buy a policy that would continue to offer insurance even if a claim against it has already been made.

We are able to provide all types of policy; please talk to us if you are in any way uncertain.

How much will be paid out ?

A decreasing term policy gets its name from the fact that the sum assured gradually reduces over the term of the policy.

Whilst at first you may wonder why anybody would want such a policy, if you consider that if you are using the policy to protect a debt like a repayment mortgage, you will realise that the amount you owe your mortgage lender will also reduce over the years.

This therefore makes these policies suited to any situation where the actual amount you require to be paid out will reduce over time.

When a decreasing policy is used to protect a mortgage or other liability, the policy has a built-in interest rate associated with it. These interest rates are typically 7% - 10%, but it is possible to get providers to quote using different interest rates.

The sum assured therefore reduces based on an assumption that you are paying an interest rate of 10% on your mortgage. As long as interest rates do not go above 10%, then in the event of a claim there should be at least enough money to repay your mortgage.

It should be noted that if interest rates went above 10% for a considerable period of time, then in the event of a claim you may not receive all the money you need to repay your mortgage.

If you buy a level term policy then the full sum assured will pay out should you die during the policy term

How much will it cost ?

Most insurance quotes are given based on standard rates. This means that the premium quoted will be based upon obvious factors such as your sex, age, occupation and whether you smoke or not. Because the quote is not based upon any medical underwriting, it cannot be guaranteed until the insurance company issue you with acceptance terms.

On application, the insurance company will fully assess your application including any medical reports or tests as necessary.

Once the policy has been underwritten, the insurance company will issue formal terms to you, including the monthly premium. Whether the premium remains the same during the term of the policy will depend on whether you have selected a guaranteed or reviewable policy.

A guaranteed premium is exactly what you would expect, namely the premium will be the same throughout the life of the policy.

A reviewable policy will start out with an initial premium (normally cheaper than the guaranteed premium), but after a certain period the insurance company will review the policy. At this point they could adjust the premium you are required to pay.

If you want to protect the policy against the impacts of inflation, or have other reasons to gradually increase the value of the policy, you could choose to “index” the policy. This means that each year the benefit will increase in line with a known index, such as the Retail Price Index (RPI) or an agreed percentage. With an indexed policy both the benefit and the premium will increase year on year. There will be other charges for administration and running of the policy. These are included in the monthly premium. You will be able to see details of these charges in the illustration we provide to you.

The insurance company will also pay us a commission for introducing the business and providing you with help and information. We are keen to stress that this does not make it more expensive for you to deal with us, in fact as recognised independent financial advisers some insurance providers give us preferential rates.

Are there any other benefits I can add to my policy ?

Most life insurance policies will allow you to add several benefits to your policy. Obvious examples are Critical Illness insurance and terminal illness benefit. There are however some additional benefits offered by some providers that may be of interest to you:

Waiver of Premium
This benefit will continue to pay the premiums on the policy should you be in a position where you are unable to work due to accident or sickness for a defined period (typically 6 months). The premiums will continue to be paid for you until you recover, or the policy term lapses, or you reach a specified age, typically 60.

Conversion Option
This will give you the possibility to convert the policy to a whole of life policy without further underwriting. This could be a benefit to you as you get older and find premiums more affordable for the longer term, or as your needs change, or if you discover that you can no longer obtain term insurance and want to ensure you have some cover for life.

Can I increase the amount of benefit I receive from the policy ?

The sum assured is set and underwritten at the outset of the policy. If you decide that you simply want to increase the level of cover for personal reasons, it may be difficult to do so using your existing policy without further underwriting.

Many insurance providers will allow you to increase the level of cover without underwriting if certain events occur in your life. This is known as a “Guaranteed Increase / Insured Option”. The increase will be restricted to certain limits, but it will nevertheless give you the increased cover you require.